Credit Crunch Bites Deep Into The Cost Of Meat And Other Foods

Credit Crunch Bites Deep Into
The Cost Of Meat And Other Foods

The rising cost of feed and fuel has livestock farmers operating at a loss. Coupled with the demand for food from foreign countries and this created a loss of revenue for farmers. Therefore a greater impact is going to be felt by the consumer as farmers raise their prices to establish a profit or simply break even.

Typically raising a family even in a good economy is taxing. Now consider a faltering economy and the double whammy of meat prices beginning to soar and workers are trying to determine yet again how to stretch their dwindling dollar. Between scrimping by on wages that have not increased in many months just to pay household expenses, consumers are going to feel another blow at the grocery store.

The increase in the cost of meat seems almost cruel. Yet livestock farmers have no alternative. To consider slaughtering animals to decrease the supply, enabling them to raise the prices they can charge over the long haul is one measure farmers must take. Therefore this inflation on food could possibly double in 2008. Further challenging consumers to spend their money wisely on meat and other grocery choices.

Ethanol production and heavy export demand has driven up the cost for grain which in turn raised the cost of feeding livestock. The chicken producers are reeling in the widest quarterly loss after the increase of feed prices. Expenses for the poultry industry could rise to a unprecedented one billion dollars. This includes the $600 million for the cost of corn and soy meal and $100 million costs for grain. The credit crunch affects all faucets of the livestock industry as everything that relies on corn, wheat and corn syrup has to rise.

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As beef prices were already high, the inflation will likely only have an impact on the chicken and pig industry. The action that further reduces options for fresh meat and poultry. Many consumers are beginning to rely on more inexpensive eating options that may not always be the healthyist. Increases in meat prices will continue to hinder spending at the super market.

However, the United States seems to spend the least amount of money on food purchases - about 6 percent. While consumers in the United Kingdom spends almost 9 percent on food items and the rest of the world at least 10 percent. Soon, the U.S. will likely find themselves closing the gap with poultry and pork prices certain to rise. Consumers will feel the sting at the checkout line.

Consumers may find a short reprieve in the cost of meats as farmers increase the slaughtering of animals. This practice will increase the supply therefore driving down prices seen in the markets. Yet once that supply is diminished and the farmers herds and flocks shrink, prices will begin to climb. Also a four to five percent decrease in breeding sows will likely occur as well as the anticipated failure in hog farms, consequently driving up prices.

Unfortunately these measures by livestock farmers are to aid in the relief of the credit crunch they are experiencing but add to the financial burden most people feel. The credit crunch has affected meat prices by not only driving up prices for all meats but also limiting healthy choices for consumers.

Overall food prices are predicted to increase an additional 5 percent this year alone. However fuel prices and high demand from foreign countries may even push food inflation towards the 10 percent mark. In retrospect consumers are not alone in trying to survive how the credit crunch has affected meat prices. Livestock farmers have been operating at a loss and need to take uncompromising measures to increase their profits in order to remain afloat in this struggling economy.